Sebi board to discuss minimum public holding, IPO safety net

Chennai: Market regulator Sebi's board will meet on Thursday to discuss steps required for dealing with promoters failing to comply with minimum public shareholding in listed companies, as also safeguarding the small investors' interest in IPOs.

The regulator is also expected to update its board about two high-profile corporate cases -- one involving refund of investors' money by Sahara group and the other about Reliance Industries' appeal against its decision on settlement of cases through consent mechanism.

The board may also approve new measures to help companies meet minimum public holding norms, a senior official said.

The private sector companies need to attain a minimum public holding of 25 per cent by June this year, while a threshold of 10 per cent is required by PSUs by August.

Promoters of nearly 190 companies are yet to bring down their shareholding to desired level to meet the guidelines, although Sebi has already provided various options to meet these guidelines. In addition to steps needed to help the companies meet the norms, Sebi board may also discuss measures to be taken against the non-compliant entities, official said.

In its Thursday's meeting, Sebi is also likely to discuss final norms for a proposed 'mandatory safety net mechanism' in IPOs, on which it floated a discussion paper in September and had sought public comments till October 31, 2012, while the regulator will update its board about RIL and Sahara cases.

The other two appointed members are V K Jairath and Prakash Chandra Chhotaray.

Mukesh Ambani-led RIL has approached Securities Appellate Tribunal against Sebi with regard to the regulator's decision to reject its plea to settle an alleged insider trading case through consent mechanism.

Under the consent mechanism, Sebi can settle an ongoing case after payment of certain charges and the ill-gotten gains, if any, without admission or denial of wrongdoings by the concerned entities. However, Sebi changed its consent framework regulations in May 2012, pursuant to which it found many applications, including those of RIL, unsuitable for settlement through this mechanism.

RIL's appeal before SAT was earlier scheduled for January 3, which was first adjourned till January 11 and thereafter to January 24 after Sebi sought time to study the petition.

In Sahara case, Sebi has been asked by Supreme Court to facilitate refund of thousands of crores of money collected by two group companies from close to three crore bondholders.